How Do Australian Superannuation Trustees Perceive Their Role and Effectiveness?

30 Pages Posted: 15 May 2006

See all articles by J. Michael Orszag

J. Michael Orszag

Willis Towers Watson - Reigate (Surrey Office); Institute for the Study of Labor (IZA)

John Piggott

University of New South Wales (UNSW) - Australian School of Business, School of Economics

Henry Hongho Jin

University of New South Wales - Centre for Pensions and Superannuation

Vrinda Gupta

Willis Towers Watson

Date Written: 2006

Abstract

Private pension laws in Australia concentrate considerable power and discretion in trustees. This paper reviews results from a detailed survey in 2004 of super trustees at the top 200 funds in Australia as well as an earlier pilot survey. The survey results indicate that super trustees emphasise consensus over technical competency. The main survey includes 131 responses from 54 funds with a total of A$103bn of assets under management or about 16% of the Australian market. We find a high degree of consensus among those replying. Trustees are quite confident about their overall financial skills yet at the same time only a small percentage have formal investment or finance training. Trustees have served in their roles for some time and most hold only one trustee role. There is hostility to formal regulation and in particular the new licensing structure for trustees; most trustees seem to view the system as functioning relatively efficiently. Despite the significant differences in benefit structures between the UK and Australia, our results largely mirror those of a very similar survey of UK Trustees from 2001. This may be because prior to the recent introduction of licensing in Australia, the governance structures were actually quite similar.

Keywords: Trustees, Governance, Pension fund

JEL Classification: G23, G3

Suggested Citation

Orszag, J. Michael and Piggott, John and Jin, Henry Hongho and Gupta, Vrinda, How Do Australian Superannuation Trustees Perceive Their Role and Effectiveness? (2006). Watson Wyatt Technical Paper No. 2006-3. Available at SSRN: https://ssrn.com/abstract=893483 or http://dx.doi.org/10.2139/ssrn.893483

J. Michael Orszag (Contact Author)

Willis Towers Watson - Reigate (Surrey Office) ( email )

Watson House
London Road
Reigate, Surrey, RH2 9PQ
United Kingdom
+44 1737 241144 (Phone)
+44 1737 241496 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

John Piggott

University of New South Wales (UNSW) - Australian School of Business, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Henry Hongho Jin

University of New South Wales - Centre for Pensions and Superannuation ( email )

Kensington
High St
Sydney NSW 2052
Australia

Vrinda Gupta

Willis Towers Watson ( email )

875 Third Avenue
New York, NY 10022
United States

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